Household goods giant Procter & Gamble has said it will be raising prices and cutting costs as it lowered its annual forecast and looks to mitigate the impact of tariffs.
The comments came as CFO Andre Schulten was discussing the company’s financial results for the three-month period ending 31 March 2025. The US parent company of Pampers, Bounty and Febreze cut its annual outlook after posting lower-than-expected sales for the quarter following the US-China trade war sparked by the tariffs.
A 2% year-on-year net sales decline to $19.8bn saw the business fall short of its predicted Q3 net sales by $300m. The revised annual outlook now means P&G expects total net sales for 2025 to be ”approximately” in line with last year, compared with its previous target of 2% to 4% growth.
Schulten said the business would “have to pull every lever we have in our arsenal to mitigate the impact of tariffs within our cost structure and P&L”.
Price increases and cost-cutting were the most likely options, but he did not rule out changing product formulations or sourcing raw material from outside China.
Overall sales decline, with volumes down 1%, was also partly attributed to a drop in demand due to “a more nervous consumer”. This drop was only marginally offset by higher pricing, which saw organic sales grow by a “modest” 1%.
Only P&G’s grooming division reported volume growth in the quarter, up by 1%. Its baby, feminine and family care segment, which includes Pampers, saw the largest volume drop of 2% over the same period.
Both the healthcare and fabric and homecare divisions saw volume fall 1%, while demand for oral care products, including the Oral-B brand, also dropped during the quarter. Beauty remained largely flat, with skincare volume declines partially offset by increased pricing, primarily in Greater China.
President and CEO Jon Moeller said P&G had made ”appropriate adjustments to [its] near-term outlook”, reflecting market conditions he described as a ”challenging and volatile consumer and geopolitical environment”.
Moeller also warned of “likely” price increases in the next fiscal year, but said he remained “confident” in P&G’s longer-term growth and spoke of continued investment in innovation to “improve products and drive category growth”.
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